1. Field of the Invention
The present invention relates generally to a telecommunications system for providing a central office which is independent of the local exchange carriers and, in particular, to a system which bypasses and thus does not require the involvement of an incumbent local exchange carrier central office with respect to vertical and call control features and other central office functions and which instead uses existing tariffed data network services and existing tariffed commercial DID/DOD services to provide central office functions to residents of new residential housing developments (single detached, attached, and multi-family) and tenants of new commercial developments.
2. Description of the Prior Art
The divestiture of American Telephone & Telegraph (AT&T) in 1984 resulted in the creation of seven Regional Bell Operating Companies ("RBOCs"). Since AT&T remained as purely a long distance carrier, the business of providing local telephone services came under the control of these seven RBOCs. After divestiture, the seven RBOCs (the "Incumbent Local Exchange Carriers" or "LECS") owned all of the expensive "hardwire" infrastructure necessary to provide local telephone services and owned the local networks to which all of the long distance carriers ("IXCs") had to pay access fees in order to originate and terminate their customer's long distance calls. Since the RBOCs had not been required to freely allow competition for local telephone service in the local markets, to date no company has been successful in entering the estimated $90 billion Local Exchange Carrier ("LEC") market in the United States on a large scale, large scale being defined as including residential customers. Therefore, regarding the provision of local telephone services across the United States, the AT&T divestiture in 1984 basically replaced a national monopoly (AT&T) with seven geographic monopolies (RBOCs).
Despite the passage of the Telecommunications Act of 1996, the purpose of which was to effect significant competition in the LEC markets, the existing RBOCs, due to their overwhelming size and their ownership of the existing infrastructure, have to date been successful in inhibiting any significant competition in the LEC market since any new entrant into the market has only two options for the provisioning of local telephone services: (1) building new infrastructure which is prohibitively expensive, or (2) successfully negotiating contracts with the incumbent LECs which require the payment of excessive fees to the incumbent LECs in order to utilize the LEC infrastructure to resell local telephone services. Neither of these options is particularly appealing since either option substantially favors the RBOCs in the following ways:
1. There is currently no viable, cost effective alternative to the conventional "hardwire" platform to allow large scale competition in the LEC market on a national basis or even on a regional basis. PA1 2. The costs to build a new infrastructure today are prohibitive. In a Wall Street Journal article dated Feb. 12, 1996, the costs of building such an infrastructure were projected at $5 billion to "get started" and $20 billion to "extensively penetrate the market." It has since become clear to the entire telecommunications industry that these projected costs were very low. In 1996, both AT&T and MCI announced strategic plans calling for large scale (including residential customers) building of local networks to compete with the Incumbent LECs. However, neither AT&T nor MCI has pursued these plans and both have admitted that doing so, on a large scale, would not be economically feasible. On Jul. 14, 1997, the Wall Street Journal reported MCI's projected loss of $800 million in its attempt to build local networks in a number of metropolitan markets to begin to compete for local commercial accounts. This news caused MCI to lose $5 billion of market value in one day! AT&T has also suffered significant losses in its attempt to enter the LEC market. PA1 3. The RBOCs have enjoyed one of the highest operating cash flow margins of any U.S. industry, over double that of the IXCs. While the LEC business has remained "proprietary," the long distance business, with its increased competition, has become much more of a "commodity" business. AT&T has had its market share drop to 54% since 1984 and has had its average revenue per minute cut almost in half. Hence, AT&T and MCI are not in a position to "outspend" the RBOCs in infrastructure development. PA1 4. The RBOCs have all filed to become long distance service providers ("IXCs"). In contrast to the plight of AT&T and MCI in their attempts to enter the LEC market, there are no costly infrastructure obstacles blocking entry of the RBOCs into the IXC market: the RBOCs can buy ready made networks from IXC providers at wholesale rates for immediate deployment. The RBOCs initially announced that their initial strategies regarding the provision of long distance services would be to resell, where discounts usually run about 80%. However, in contrast, the resale discounts the RBOCs originally intended to offer the IXCs for resale of local services were closer to 10-15%.
To ensure their own competitive survival, the IXCs must make inroads into the profitable LEC market. However, to date no technology has been proposed which would enable a company independent of the RBOCs to provide local telephone services at a competitive cost. None of the previously available solutions is economically viable for the reasons noted above. There is thus a great need in the art for a system and method which would enable a company independent of the RBOCs to provide cost competitive local telephone services, and hence meaningful competition to the incumbent RBOCs in the LEC market, without requiring a cost prohibitive infrastructure investment.
Accordingly, a LEC bypass technique is desired which permits cost effective competition with the Incumbent LECs in the local telephone market without requiring specialized customer premises equipment, without significant infrastructure investment, and without "deals" with the Incumbent LECs. Embodiments of the present invention have been designed to meet this great need in the art.
Embodiments of the present invention have also been designed to meet another great need in the art, the need to significantly reduce the monopolistic access charges charged by the LECs on most long distance calls, charges which cost customers tens of billions of dollars each year. Most long distance calls must be originated through the LEC switch, and most calls are terminated by the LEC switch as well. Therefore, access charges payable to the incumbent LECs continue to be incurred. Specifically, with respect to outgoing calls placed from a subscriber location, the LEC switch which serves the subscriber's customer premises equipment senses an off-hook condition and extends dial tone. When the dialed digits are received in the LEC switch, any features associated with the originating subscriber, such as speed dialing, are applied to the call, and the call is then routed to the desired destination. If the call is a long distance call that is routed to a long distance or inter-exchange carrier (IXC), then the IXC will pay originating end and terminating end "access charges" to the LEC for servicing the call, and the subscriber will, in turn, pay the IXC for the total cost of the call.
Currently, the access charges paid to LECs by the IXCs for the use of carrier common line service vary by LEC but can, depending on a call's duration and cost per minute, constitute upwards of 40% of the overall cost of the call. Accordingly, eliminating the stranglehold the LECs have on the local market and their claims to the originating end access charges could save a significant percentage of the cost of a long distance call. Bypassing the LEC and the associated originating end access charges could also save the IXCs a significant portion of their service costs for providing long distance calls and, once the associated savings are passed on to their subscribers, potentially save their subscribers billions of dollars each year in long distance charges. Payment of such access charges remains a key issue in the telecommunications industry since the passage of the Telecommunications Act of 1996 and is one of the primary obstacles to enhanced competition between the LECs and other potential entrants into the local telecommunications marketplace. As a result, any long distance service provider who can bypass the LEC and avoid payment of the originating end access charges will be at a substantial competitive advantage. Not unexpectedly, the RBOCs are utilizing every possible means to protect their access charge monopoly, and hence, have currently tied up the implementation of certain provisions of the Telecommunications Act of 1996 in district court litigation.
The inventor is aware of only three prior art techniques by which to complete a long distance call without paying the access charges to the LEC.
The first prior art technique known to the inventor for bypassing the LEC is to provide a separate communications system which provides the subscriber with access to the unregulated long distance telephone carriers through an alternative transmission path besides telephone lines into the subscriber's premises. For example, Baran describes in U.S. Pat. No. 5,550,820 a bi-directional communications system which bypasses the LEC by conveying voice and data over cable television lines from the customer premises to a switching unit that has the functionality of a Class 5 central telephone office switch (5ESS) and is connected to the public switched telephone network. In the system described by Baran, special terminal units are provided at the customer premises, and the signals from the terminal units are converted by a relay transceiver bi-directionally between the signal format of the terminal units and fixed length compliant asynchronous transfer mode ("ATM") cells. These ATM cells are then transmitted via the cable television bandwidth to a cable television hub where the ATM cells are bi-directionally converted by a transmission interface unit into time division multiplexed signals in the upstream direction away from the terminal units for connection to a cellular telephone switch, and from time division multiplexed signals into fixed length compliant ATM cells in the downstream direction towards the terminal units.
While the system described by Baran does indeed bypass the LEC, it still encumbers the subscriber and long distance carrier with many of the same problems as the conventional telephone system. In particular, since the cable television lines are typically owned and operated by a cable television company, access charges are still payable to the cable television company. Also, additional equipment, namely, the terminal units, is required at the customer premises, leading ultimately to additional cost to the subscriber.
The second prior art technique known to the inventor for bypassing the LEC is to create a virtual piped connection over the conventional telephone lines using specialized customer premises equipment at the subscriber location and a specially configured call control platform in the IXC network to originate and receive calls using in-band signaling techniques. Such a technique is described in U.S. Pat. No. 5,533,111, where Schlanger describes a system utilizing a specialized multiplexer to create a virtual piped connection by converting an analog trunk signal into a usable in-band digital carrier. The virtual pipe is established through an initial call made from the specialized customer premises equipment, while in a conventional mode, to the call control platform. Once the virtual pipe is established, the specialized customer premises equipment operates in a bypass mode such that calls made by the subscriber using the specialized customer premises equipment "bypass" the LEC. As long as the virtual pipe exists, the IXC can provide vertical and call control features and functions for incoming and outgoing calls using in-band signaling, while the call control functions typically provided by the customer premises equipment using out-of-band signaling, such as call origination, off-hook, on-hook, and ringing, are provided using in-band signaling. However, conventional out-of-band signaling may still be used to provide conventional LEC features such as call waiting. The virtual pipe to the call control platform may be used for a plurality of calls without being disconnected since the customer premises equipment is prevented from generating a conventional out-of-band mode disconnect signal until breakdown of the virtual pipe is requested by the subscriber. As a result, a subscriber can make one call and pay for one access connection via the LEC and then use that single access connection indefinitely to produce calls across that "virtual" channel.
While the in-band signaling technique described by Schlanger can greatly reduce the amount of access charges paid by the subscriber and long distance carrier, such a technique is disadvantageous in that specialized customer premises equipment is required that must be carried around by the subscriber. Such equipment adds greatly to the cost for the subscriber and is also a very inconvenient way to implement LEC bypass for the subscriber.
The third prior art technique known to the inventor for bypassing the LEC is for the subscriber to lease a DS1 (T1) line to provide direct switch to switch access to the IXC. However, this approach is prohibitively expensive to all but those companies with very high call volumes sufficient to justify the cost of a T1 line. Leasing a T1 line is quite impractical for companies or individuals with relatively small call volumes where the leasing costs of the T1 line alone would be greater than the amount otherwise paid in originating end access charges.
Accordingly, a LEC bypass technique is further desired that does not require specialized customer premises equipment and which is thus more cost competitive. A LEC bypass technique is also desired which extends the benefits of direct T1 access to smaller volume callers without the associated costs of leasing an entire T1 line. Further embodiments of the present invention have been designed to meet these great needs in the art as well.